The Friend Between the Foes: China, Saudi Arabia and Iran

Ali Khamenei meets Xi Jinping
Credit: Official website of Ali Khamenei, CC BY 4.0

China’s proximity to Saudi Arabia comes to the fore yet again as reports claim Beijing to be helping Riyadh in developing its own ballistic missiles. While this rapport with Saudi Arabia promises a host of material and strategic incentives, it might as well turn out to be a headache for China, thanks to Riyadh’s enmity with Beijing’s other and closer ally, Iran. 

The Old Ally

It was not until the late 1970s and early 1980s that China stepped its feet in West Asia. Its initial engagements in the region were limited to economic relations with a few countries.

The traditional military suppliers’ (the US and the USSR’s) refusal to provide arms to Iraq, Iran and Egypt opened doors for Chinese arms trade in the region with the eight year long Iran- Iraq War (1980-1988) serving as a major, though short lived, breakthrough. By the late 1980s and early 1990s, China’s arms trade began to plummet. While there was no scope for domestic sale with military modernization being accorded a low status among the ‘Four Modernizations’, the United Nations and the United States’ imposed  arms sales embargo on Beijing’s best customers Iran and Iraq as well as the West Asian states’ awareness of more effective and easy to use weapons served as other reasons behind this fall. As a result, China’s overall arms sales fell by 80% in the region.

China soon re-entered the region in the early 1990s, this time as a wholesale oil importer. Domestic economic modernization required increasing energy resources and China turned to its allies Iran and Iraq for it.

Saddam Hussein ruled Iraq was China’s major source of oil. In 1997, Beijing signed oil PSAs with Baghdad and a $1.26 billion investment through a 22-year contract with the hope that the UN sanctions would soon be lifted. However, The US’ orchestrated offensive spoiled China’s plans. After overthrowing Saddam Hussein in 2003, the US monopolized all of Iraq’s oil reserves and the first ones to be nullified were Chinese and Russian concessions. In this scenario, China turned to its other partner, Iran.

While Iraq was pure business, relations with Iran (forged in 1971) were ridden with several contradictions. China could not get itself to approve of Iran’s fundamentalist Islamist government installed since the Revolution of 1979 as it had the potential of flaring up opposition among China’s Muslim population residing mainly in the frontier province of Xinjiang.

On the other hand, Iran’s oil reserves could not only quench China’s thirst but Tehran, since the dethronement of the Shah, identified itself as a staunch enemy of Washington and served as a perfect anti-US citadel to pursue its power ambitions. Iran’s acceptance of not to interfere in China’s internal affairs solved the contradiction. Iran not only supported China post the Tiananmen Square incident when it faced international isolation from the US and its allies, but also remains silent on the allegations of human rights abuse in China’s Specially Administered Regions such as Xinjiang till date. 

China has also come to Iran’s aid by stepping up investments as well as material and diplomatic aid. Since  the  1990s, Chinese  companies  have  also  been  engaged  in  oil  and  gas  exploration projects.

Tehran is also set to reap benefits from China’s Belt and Road Initiative as well as the 25 year Strategic Cooperation Deal between the two is bound to bring the two closer as it promises investments of a whopping $400 billion on behalf of Chinese companies in various sectors of Iran including banking and telecommunications in exchange for a heavily discounted, steady supply of oil. 

China has also diplomatically guarded Iran’s interests by advocating lifting sanctions imposed on it owing to its nuclear proliferation program, earning the tag of a “Friend of Difficult Days” in return. 

Newfound Friendship

Unlike Tehran, relations with Riyadh did not commence on a cordial note. Saudi Arabia was a staunch supporter of anti-Communism, a firm US ally and a supporter of the nationalist government in Taiwan which made diplomatic relations  with Beijing non-existent till the late 1980s when owing to the threat of a nuclear Iran and Israel, Saudi Arabia engaged in a clandestine deal with China to install a missile base on its territory.

By 1988 when the Reagan administration got to know of this development, it asked King Fahd to immediately remove it which he refused. King Fahd expelled the American ambassador and the missiles remain operational to date, marking a major setback in the bilateral relations.

While Riyadh has purchased drones from China which it uses in Yemen, it has heavily relied on its Western allies for more expensive conventional equipment. In the early 2000s, the focus shifted to trade in energy resources and Saudi Arabia became Beijing’s largest oil exporter. In 2006, Saudi monarch  King Abdullah’s visit to Beijing marked an important juncture as it was not just his first overseas visit after ascending the throne which came at a tense period of Sino-US conflict, but both sides described it as a “milestone” of future cooperation.

Another important exchange has been Saudi Crown Prince Mohammad Bin Salman’s 2019  visit to China. Trade dominated talks and Khashoggi’s issue was not raised. Chinese investments are crucial to Prince Salman’s grand Vision 2030 focusing on infrastructural development, job creation and transportation to move beyond the oil economy. Moreover, the pandemic has hit the Saudi economy, and particularly the Royal House, hard as oil prices reached an all time low. China’s medical aid proved crucial. Moreover, the Biden administration’s policy of scooting  away from Prince Salman over human rights concerns has brought China and Saudi Arabia closer and extended Beijing’s influence in the region.

The latest reports claim that China is aiding Saudi Arabia in developing ballistic missiles. While such proximity gives China an upper edge over the United States in the region, on the flip side, Beijing is bound to be caught in the complex web of rivalry between Saudi Arabia and Iran.

Walking the Tightrope

The rivalry between Saudi Arabia and Iran started as a religious schism which soon turned geopolitical. Being the cradle of Islam, Saudi Arabia led by its Sunni rulers envisioned itself as the leader of the Islamic world which brought it in conflict with the Shia dominated Iran. Tensions intensified after the overthrow of the Shah in the 1979 Revolution as an anti-American theocracy was established which envisioned itself as the contender for leadership in the region. Saddam Hussein’s dismissal and the installation of a Shia dominated government in Baghdad removed an adversary from Iran’s vicinity, emboldening it further. The conflict soon turned geopolitical as both engaged in proxy wars, supporting rival factions in Syria, Yemen and Lebanon.

While tensions between the two seem to ease with more bilateral meets, they are unlikely to produce a stable relationship with the nuclear issue being a major stumbling block. Iran’s nuclear proliferation and support for militias in the region irk Riyadh, on the other hand, Tehran demands the United States to lift the sanctions which crippled its economy  before any decision on denuclearization could be taken. China’s role in aiding the two is bound to create trouble.

Scholars believe what China and Iran share can be defined as a ‘Great Power- Middle Power relationship‘ where the Middle power (here, Iran), owing to the diplomatic, economic and military asymmetry in the relationship fears abandonment  and demands the Greater power to come to its aid, even complaining when it does not. Such an attitude was displayed in Tehran’s complaint that China avoided Iranian ports and ships for trade to avoid US imposed sanctions. With allegations of aiding Riyadh’s missile program, Tehran is bound to get more paranoid, demanding greater concessions for itself. Moreover, growing disenchantment between the US, Iran and Saudi Arabia might put China into a direct conflict with Washington which it does not appear to be resilient enough to face. Allegations of human rights abuses by its West Asian partners also have the potential of further tarnishing China’s international image. More importantly, weapons proliferation in the region would instigate fresh tensions furthering the possibility of an armed conflict which would have unimaginable consequences for not just the region but the world at large.

China must act responsibly and create non military, preferably economic channels of communication and engagement between the two as intensified tensions in the region would ultimately affect its own interests as well as international stability. Beijing’s dream of establishing itself as a key player in West Asian politics would depend on how well it treads the tightrope between Riyadh and Tehran which will certainly not be a cakewalk.

Cherry Hitkari is a postgraduate student of East Asian Studies at University of Delhi, India. The views and opinions expressed in this article are those of the author.